All posts by Clifford E. Kirsch, Editor

Eversheds Sutherland With more than 25 years of experience, Cliff regularly counsels clients on the design and distribution of investment products including wrap-fee programs and other advisory products, mutual funds, bank collective investment funds and insurance products. He also focuses on issues related to the design and implementation of compliance programs at financial services firms.

Inconceivable: The Princess Bride Fences with SEC and FINRA Enforcement Matters from May 2021

From Brian Rubin and Jessica Rodgers in this month’s column for NSCP Currents:

This year marks the 35th Anniversary of the classic movie, The Princess Bride. According to the movie, the story is about:

Fencing. Fighting. Torture. Revenge. Giants. Monsters. Chases. Escapes. True love. Miracles. 

In other words, many of the elements we regularly see in enforcement actions. “Inconceivable” as it may sound, we can make a case for all of them, with the possible exception of “True love.” (Although, let’s be honest, who among us doesn’t love a cleverly drafted legal argument or a well-written Form ADV?)

Read more here.  As you wish. . . .

InSecurities Podcast — It’s All About Connecting: The Value of PLI’s IA/BD Programs

Thanks to Kurt Wolfe and Chris Ekimoff for having me as a guest on the lastest installment of PLI’s inSecurities podcast.  As someone who tunes in regularly, it was a pleasure for me to do. I enjoyed chatting about broker-dealer and investment adviser regulatory issues, my work with PLI including the upcoming live webcast Securities Law and Practice 2021: How the SEC Works on June 28.

To hear this episode, and other episodes, click here. 


We are not Amused: The Crown and SEC and FINRA Enforcement Matters from April 2021

This month’s securities enforcement article uses the television show “The Crown” as its primary source of inspiration in memory of Prince Philip, Duke of Edinburgh, who died on April 9, 2021; in awe of Oprah’s timing, interviewing skills, ability to get an interview; and out of respect for the Queen, “Her Majesty Elizabeth the Second, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland and of Her other Realms and Territories Queen, Head of the Commonwealth, Defender of the Faith,” and the Prime Ministers who served under her.  Please note that, as far as we know, “The Crown” did not involve investments in securities. . . Nonetheless, the Netflix television show does involve rules and codes of conduct; intrigue and misdirection; punishment and praise; drama and comedy; and good and evil.

Read more here.

FINRA’s diversity and inclusion efforts

FINRA has recently taken steps to advance diversity and inclusion in the broker-dealer industry, including issuing Regulatory Notice 21-17, on April 29, 2021, seeking comments. FINRA stated that it is committed to supporting diversity, inclusion and equal opportunity efforts by the industry. The request for comment noted that regulatory agencies such as FINRA have an opportunity to evaluate how their rules and actions may have unintended disparate impacts on those within the industries they regulate and how they may unintentionally impede diversity and inclusion. In connection with these efforts, FINRA requested comments by June 28, 2021 “on any aspects of our rules, operations and administrative processes that may create unintended barriers to greater diversity and inclusion in the broker-dealer industry or that might have unintended disparate impacts on those within the industry.”  Subsequently, on May 20, 2021, FINRA chair, Eileen Murray, participated in a virtual fireside chat at FINRA’s Annual Conference with FINRA CEO, Robert Cook, during which Ms. Murray discussed her hopes to see more accountability and standardization in the reporting of diversity and inclusion efforts within firms in the industry, and that tying executive compensation to diversity goals would make a “world of difference.”

Read more here.

DOL warns the ERISA fiduciary debate is far from over

The FAQ’s recently posted by the Labor Department on its latest ERISA fiduciary investment advice guidance warn that this project is far from over, and are troubling in a number of respects.

  • DOL is compelling the regulated community to comply with its recent guidance by December 20 notwithstanding its intention to change the governing rules in the near term.
  • DOL is on the path to recreating its vacated 2016 rule (other than the private right of action for IRA owners).
  • DOL may be steering financial services providers to a fiduciary model, notwithstanding how they are treated by their primary regulation.
  • In sum, the signals point to DOL resuming its 2015-2016 effort to restructure the financial services industries.
  • Given the range of best interest standards recently extended to financial services providers under other bodies of law, there cannot be an updated empirical record that justifies further regulation by DOL.

Read more here.